Corn Hangover

As dawn broke over Illinois' cornlands last week, Farmer John Landers, 38, who owns 400 acres near Grand Ridge, opened wide the throttle of his big International tractor and roared into a 20-acre cornfield. The three heads on his $2,400 corn picker attacked the tall standing rows of corn. Long before Farmer Landers had made even one turn around the field, the trailer hitched to his tractor was overflowing with fat, golden ears. His expected yield: 90 bu. to the acre, v. less than 60 last year.

Enticed by U.S. corn-price supports that place no limit whatever on acreage, U.S. farmers have so expanded their corn plantings that this year's harvest will hit 4.4 billion bu., 17% more than in record 1958. Iowa, the No. 1 corn state, expects an 827-million-bu. harvest, up from the record 669 million last year. Illinois, No. 2, anticipates 696 million bu., up from 599 million. Even No. 3. Minnesota, looks for 360 million bu., an increase of 15% over last year, despite a severe drought.

Pick Your Acreage. The trouble for both farmers and taxpayers lies in the new corn-support laws passed by Congress last year. Under the old system, farmers who voluntarily restricted their acreage were protected by a support price of $1.36 per bu., while those who planted all they wanted to plant got only $1.06. The new law, supported by both Republicans and Democrats, aimed at compromise with a straight $1.12 per bu., with no attempt to control acreage. Secretary of Agriculture Ezra Taft Benson rashly guessed that there would be little increase in corn production. Even when farmers disclosed their intentions to plant 10.9 million more acres to corn, he hoped there would be less of other grains, such as sorghum, oats, barley, etc., thus no substantial addition to total feed surpluses.

Benson was wrong on both counts. Corn production is up by 600 million bu., and farmers piled on so much of everything else that net feed production is up 5%. On corn alone, Benson faces having to buy up to $672 million worth of this year's corn, on top of an estimated $1.8 billion worth of previous years' corn.* Meanwhile, storage, transportation and interest on earlier corn surpluses are costing $1,000,000 a day, more than twice the cost of maintaining the U.S. courts and Congress. Total added outlay for this year's corn charged to the U.S. taxpayer this year: around $1 billion.

Pick Your Yield. The one redeeming feature of the new law is that price supports are based on 90% of the average selling price on the open market of the last three years, with a floor of 65% of parity. This year market prices are poor. Farm storage space is already so taxed that farmers will have to sell much of their crop in the open market at prices as low as 90-c- per bu., for the lack of a place to store it. Averaged over three years, the lower prices mean that a 4-c--to-6-c- drop is possible next year in the price-support level.

Agriculture experts hope that a rapid price drop will discourage production. The U.S. corn farmer, already unhappy about this year's low prices, has an answer to that: rising productivity that enables him to grow ever bigger crops for ever bigger total subsidies, no matter what the price.

Last week at Grand Ridge, Ill., Arthur Walter Seed Co. was offering farmers a pick-your-yield service. The farmer merely brings in a soil sample, writes down whatever number of bushels per acre he desires, and in half an hour gets back a seed and fertilizer prescription. Says Vice President Everett C. Walter: "It's just as easy to raise 100 bushels an acre corn as 50 bushels. The only chance is weather, and there is not too much chance in that."

*The carry-over of corn would be a whole lot bigger except for subsidized exports of corn.

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